Supplier Licensing Review announced by Ofgem – our response

Ofgem is proposing financial and customer service tests for new energy suppliers in its Supplier Licensing Review

New energy suppliers which have entered the market over the past few years have offered consumers more choice and helped to drive down energy prices and drive up customer service standards.

However, complaints against some suppliers have been rising recently and Ofgem has had to step in when others have ceased trading; last week Extra Energy and Spark Energy closed down.

Elsewhere, Ofgem is opening enforcement investigations against two suppliers that have failed to make payments owed under the government’s Renewables Obligation scheme. It is seeking repayment from two other firms.

As a result, the regulator is proposing financial and customer service tests for new energy suppliers in its Supplier Licensing Review. Companies would have to demonstrate they have adequate financial resources and can meet their customer service obligations before the regulator awards them a licence to supply energy under the proposals.

The proposed new tests for suppliers wanting to enter the market aim to ensure consumers will be better protected against the risk of poor performance, while still allowing more competition and innovation in the energy market to benefit them.

Our Director of Commercial & Trading Nick Haines responds:

“We welcome the ‘Supplier Licensing Review’ that Ofgem has initiated to reduce the likelihood of inappropriate suppliers from entering the market in the first place. We will be contributing to the consultation.

“We also watch with interest Ofgem’s actions against those suppliers in the market that are not complying with the regulations in place for all.”